04-09-07 Item 7C, Finance Dept Update

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Memo City Council, City Administrator Finance Department Update 2 previous invoices to obtain codes. This means that I will have to analyze the fIrst quarter numbers and reclassify the expenses before I can give you first quarter reports. Another area of my time was spent in the hiring/interview process for the Accounting Analyst. Joe Rueb started on March 26, 2007. This meant the Finance Department was fully staffed for the first time since I had been here, Up until this time, I had been doing both jobs with the help of Pang and Sandy. We are now training Joe on all the functions of the Finance Department. The 2006 Audit has been underway for about one month and should finish sometime in the next week with field work. As soon as this is completed I can give council and management "unaudited" results and balances for 2006. I will then be starting the financial statements which we will be doing in-house, something the City has never done, Weare well within timelines for the audit as the State Requires the Financial Statement and Audit to be submitted by June 30, We anticipate the presentation of the Financial Report to the council sometime in June, There have been several challenges to completing this audit. First, I am new and do not know the history on many of the transactions and balances; second the auditor is new and doing a very thorough and in depth job since it is their fIrst time. Previously the auditors have always done the correcting and adjusting entries, this year I have been doing all the entries which is resulting in a savings to the city as there would have been an additional charge due to the time involved. The auditors thus far have not had to make any entries. I have been fully examining all the balance sheets accounts and verifying that they are correct. This has taken longer than expected as I have been finding errors in coding and reporting, The desired end result has been happening, but the accounting for the transactions are not always correct from a reporting stand point. For example, the grant to clean up the Chesapeake property was run through the escrow accounts and then reimbursed to the developer - it should have been recorded as revenue and then paid out as a business subsidy expense to the developer. I have also found a number of credits the City has with various vendors. I have contacted all these vendors and requested reimbursements which total about $11,000, Currently we are in the process of converting the remaining utility billing accounts on Banyon to the Springbrook system, A meeting is schedule on April 11 with IT support and Utility Billing in Roseville to answer questions we may have and to provide support, I have observed that we need to update many of our financial policies and procedures and will be working on them and bringing them to Council for approval as they are completed. We have also been working on cross-training staff so that we have back-up when people are out sick or on vacation, Another area that my time has been spent is on working with other departments to determine the financial impact of various proposals and projects, This gives the Council and management greater understanding about feasibility of a decision. Once we have financial numbers from the audit, this will become much more meaningful and we should be able to do more analysis for these decisions,